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Workers' Compensation Insurance is required by law for Florida businesses and the rates are established by the state government. There are many ways to control your final cost and reduce the premium that you pay each year for this coverage.

All businesses in Florida with more than 4 employees and more than 1 employee in the construction industry are required to carry workers' compensation coverage. The law contains many details in regards to policy limits and the rights and compensation an injured worker should receive.

Classifications

The classification system's objective is to group employers and their payroll into classifications that reflect the exposures common to the work performed. In Florida, these classifications are created by NCCI, the National Council on Compensation Insurance. There are roughly 700 classification codes used in our workers' compensation system.

Determining the proper classification code for a particular employer is not always easy. Sometimes small details can make a big difference in which classification code is used, which in turn can make a big difference in rates and premium. As a business owner, it is important to understand the codes under which your employees are classified and make sure the definition includes the work they perform.

Please feel free to contact us about this or request that we take a look at your policy to be sure your employees are classified correctly.
There are six parts of a workers' compensation insurance policy:

1. The first part defines the workers' compensation coverage that is offered in the policy.
2. The second part defines the employers liability coverage offered in the policy, which
provides liability coverage to protect the insured for the possibility of a lawsuit that results
from an employee injury.
3. The third part of of the policy defines the coverage provided in other states where business
was not conducted at the policy period, but develops during the policy year.
4. The last three parts specify the insured's duties in the event of an injury,
5. the rating procedure,
6. and the conditions that apply to the policy.

Businesses also often use multiple classifications to group their employees by job duties and use the rates associated with each classification. The resulting total is the manual premium for the policy. The experience modifier and discounts are then applied to this number to get the total estimated premium. At the end of the policy period, there will be an audit to determine the actual payroll over the year and the difference between that and the estimated premium will be paid or returned.

Premium Credits

Safety Credit

There is a 2% premium credit available for employers who have certified that they have established a workplace safety program that meets or exceeds the provisions provided for in Section 440.1025 of the Florida Statutes.

Certification is required for each year in which premium credit is permitted under this program and is based upon evidence contained in the file of the insurer at the time the credit is allowed.

Drug Free Workplace Credit

There is a 5% premium credit available for employers who have certified that they have established a drug-free workplace in accordance with rules as established by the Division of Workers’ Compensation of the Florida Department of Financial Services.

The premium credit is applied to the insured’s policy pro rata as of the date of receipt of certification by the carrier. Self-certification by the employer may be accomplished by completing Florida Form 09-1 and is subject to physical verification by the insurer.

FCCPAP Credit

FCCPAP stands for the Florida Contracting Premium Adjustment Program. Employers in Florida with contracting classifications and a payroll composed of wages greater than $10.00 per hour may qualify for this additional credit ranging from 5% to 25%.